What “Building Back Better” Might Mean for Education and Job Training in the United States
Two Americas are emerging from the pandemic. One features well-paid, highly educated, technically adept workers who can do much of their work sitting at a computer at home. The virus forced these people out of their offices and into their homes, but they went right on working, and collecting their paychecks. Their employers, to their surprise, found that their productivity, if anything, went up, not down. That’s not least because many of them no longer had to sit in cars for two or three hours of commuting. Employers all over the country are now planning to bring their staff into the office only one or two days a week. Pollution from commuting traffic will go way down and the cost of building and maintaining the highways needed to accommodate rush hour traffic will plummet, as will the need for expensive office space. Many managers and professionals are deciding that they will be much better off moving to what have been vacation homes in idyllic locations to take up residence full time while continuing to work. That will bring a new and welcome source of tax revenue to many rural states and perhaps even stem their steady population decline and bring new sources of ideas and skills to seed a new economy. These Americans have employer-provided medical insurance and 401-Ks. As the Fed poured money into the economy to prop it up during the pandemic, the price of equities soared and a good deal of that money wound up in these people’s greatly enlarged retirement and brokerage accounts. For the Americans I just described, CO VID-19 has been an inconvenience, a source of anxiety, an annoyance and, dare I say it, an unexpected financial boon.
And then there is another America. These Americans used to work in restaurants as cooks, servers and dishwashers; or in malls as clerks and cashiers; or in department stores as stockers and inventory takers and fitters; or as bar keepers or on cruise ships as cleaners, crew and entertainers. They drive cars, trucks, limos and taxis, take care of our kids in child care centers and serve as pickers in our warehouses. They butcher our meat and prepare our ready-to-eat frozen meals. They pick and pack our crops. They mine our coal and make our steel. These are the Americans with less than a college education. They are most Americans. The ones who worked in industries decimated by COVID-19, who have lost their jobs and can’t find other ones.
The outlook for those in this second group, the group with little education or technical skill, is rather grim. Many of the jobs they lost will not be coming back, now or ever. Yes, it is true that many American manufacturing firms are diversifying their supply chains and some are bringing work back to the United States. But most of that work is being automated. Automated manufacturing equipment cannot get COVID-19, does not require social distancing and special air conditioning and will not sue if the company is not strictly following CDC recommendations. Yes, it is true that e-commerce firms like Amazon are hiring, but, if you look closely, they are busy automating the work they are hiring people to do. Yes, the restaurants will come back, but a growing number will have iPad terminals for customers to place their orders and automated machines preparing the food. Many that served the commuters will simply disappear. We will get self-driving trucks before we get self-driving cars, but, eventually, millions of workers will be put out of work by automated machines.
Much of this would have happened anyway, in time, but COVID-19 is rapidly accelerating the speed with which work is being automated. That is in part because big companies have great big piles of cash but not much demand. As they look at the return of demand, they have a choice between investing in hiring people back to do the work or buying machines that will do it. For years and years, the real value of the minimum wage has been declining with inflation. It is long past time to increase the minimum wage but increasing it will just increase the already strong incentive for employers to substitute machines for people.
Automation is not a threat to everyone. Workers who are highly educated and who bring a high degree of technical skill to their jobs are more likely than not to be using intelligent technologies to make them more productive. People who do work that requires them to be in the same place as the person they are serving—like an occupational therapist, a caregiver in a nursing home, or a hair stylist—are not going to be replaced anytime soon by someone at the other end of an internet connection.
Years ago, researchers at Oxford University estimated that 47 percent of jobs in the United States could be done by automated equipment that was available then. Since then, the cost of that machinery has declined and the machinery has grown steadily more capable.
Thirty-one years ago, the Commission on the Skills of the American Workforce issued a report titled America’s Choice: high skills or low wages! The report was front page news in the nation’s top newspapers and was featured on all the leading networks and cable channels. The thesis of the report was neatly encapsulated in its subtitle. The country had a choice. Advancing globalization and automation had created an environment in which the country could either greatly increase the skills of our workforce or we would have to lower our standard of living.
Everything forecast in that report if we did nothing has come to pass. According to the National Assessment of Educational Progress (NAEP), there has been no improvement at all in the skills of graduating high school seniors while more and more countries have exceeded us both in graduation rates and student achievement. According to an analysis of data from the Organisation for Economic Co-operation and Development (OECD) done by the Educational Testing Service, the basic skills of millennials in the American workforce are the lowest or tied for lowest among all the countries they surveyed. It seems that the country understood that the choice was between higher skills and lower wages and chose lower wages.
The Fed has said that it won’t rest until we get back to full employment. In my opinion, that goal is unachievable without a radical improvement in the skills of the American workforce. Workers in the United States are now competing with countries in Asia whose workforces were largely illiterate 40 years ago, but whose high school graduates leave high school now with the equivalent of as much as two-and-one-half years more education than our high school graduates. Our high school vocational education system has almost vanished. Our community colleges have adjusted to the poor performance of our high school graduates by offering a curriculum that would be regarded as a high school curriculum by the standards of any country leading the OECD league tables. They are the primary source now of vocational education in the United States, but the quality of the technical training available in most of our community colleges is far behind the quality of vocational education in Switzerland, Singapore and many other countries. Our firms are investing much less in staff training than they used to. The Army, which was once a major source of middle-level technical skills for the whole country when young people were being drafted, now keeps the people it trains, so they are no longer available to the civilian economy.
More than half our workforce and easily half of the young people coming out of our high schools are in what amounts to a double bind. If they face one way, they see young people in countries on the other side of the world who are better educated and better trained than they are and are more than willing to work for much less, because their wages will go much farther there than they will here. Those are the countries which only a few decades ago were largely illiterate. The global internet, just emerging when the America’s Choice report was released, now makes it possible for well-educated people in those countries to work for American firms without leaving either their country or their home. Whereas the first wave of globalization had to do with manufacturing and affected mostly those with very little education, this second wave is largely focused on services and encompasses all kinds of work that can be done remotely. Thus far, the educated in the United States have been largely insulated from the ills of globalization. In this stage you had better be very well educated and highly skilled in the right kinds of work. If you are not, those people in those other countries who are better educated will be coming for your job, too. And they won’t have to move.
But competition that comes through the internet from abroad and from others engaged in manufacturing who have better skills and more education are only part of the challenge. If the less educated in the U.S. look the other way, what they will see is the advance of intelligent machines right here in the United States. The scale and speed of that advance since America’s Choice was released 31 years ago is simply breathtaking. Since that report came out, there have been stunning advances in natural language processing, machine learning, sensing, the ability of the machines to handle things that are fragile and more. They can now write music, stories, and news reports and invest money and destroy military targets and drive trucks and mine ore and cook food in ways that rival the best that humans can do and do all these things far better than was possible when the America’s Choice report was released.
What has not changed is the American education and job training system. Nor have any of the performance metrics that matter changed in decades, while one country after another plows right past us.
My message to the Biden administration system is very simple. You are focused now, for reasons that are perfectly understandable and with which I agree, on measures intended to put our economy back on track, especially for the most vulnerable and, with respect to education, providing better access for those who have not had access to the services they need and deserve. Ninety-five percent of Americans “favor” or “strongly favor” a national program that would provide a combination of paid work and job training opportunities for those who lost their jobs during the COVID-19 pandemic.
Do it. Make it possible for millions of unemployed people to get the training from the nations’ community colleges and other providers that will make them more attractive to employers offering jobs and, while you are doing it, give them the income support they and their families will need to stay afloat while they are in training.
But, if all you do is provide better access to the system we have for education and training, you will fail. That system does not have to be improved. It has to be replaced with a much better system, one designed not to meet the needs of the mass production industrial economy for which it was designed a century ago, but the kind of modern economy we have now. The McKinsey report I cited above makes it clear that, because of the pandemic, almost all the growth in employment from now on will be in high- skill, high-wage jobs. That is impossible to do with the education and job training system we have.
So, while you are working in the near term to provide income support and a form of what amounts to triage training to the today’s unemployed as an emergency measure, work at the same time to put in place a strategy to create the kind of education and training system the country needs in the long-term to build widely shared prosperity for everyone.
In the nineteenth century, when American ships entered Japan and forced it to open up trade on American terms, the Japanese were furious. Young turks in the government overthrew those in power. Among the first things they did was put together a delegation to the foreign powers that had invaded them to demand more equal treaties. When they got to Europe, they were astounded at the technical achievements of the countries that had conquered them. They observed that they had been overcome by countries in which the common people had been educated. They came back determined to match their achievements in both education and industry. And they succeeded.
Since then, Singapore, Taiwan, China and Hong Kong have done the same thing, benchmarking the best and doing it even better.
At the onset of the 20th century, we—the Americans—emissaries to Europe to see how the best in the world ran their chemical industry, made steel and shaped their research universities and we came back and did it better.
At least half the American workforce and an equal proportion of our high school graduates is headed for a very difficult future, long after the pandemic is over. If the Biden administration wants to build it back better, it might consider creating a Presidential Commission on the Skills of the American Workforce and charging that Commission with visiting the countries with the best education and job training systems in the world and then reporting back to the president and the American people on what it would take to build a system here in the United States that would perform as well or better than the best systems in the world. I do not doubt that, if the president created such a Commission and put his prestige behind its recommendations, the whole country would pay attention.
Give the Commission two years to do its research and finish its report. Involve the people and institutions here in the United States that have done an outstanding job with the triage program in the work of the Commission so that they can not only be a source of good ideas and an American sounding board, but can also be ardent supporters for the report of the Commission when it is released.
But don’t wait until the Commission publishes its final report to begin putting in place some of the key elements of the continuous lifelong learning system this country will need to move forward. Task the Commission with making interim reports with findings and recommendations that will enable us to get a jump start on building key components of the system we so desperately need to support broadly shared prosperity for all Americans.
If we want not just to build it back, but to build it back better, that’s what we will have to do. There is not a moment to lose.